Page Industries Ltd stock is just 3% away from its 52-week high of ₹42,922 seen at the beginning of this month. The shares are trading at about 58 times FY26 estimated earnings, based on Bloomberg data. Valuations appear steep amid expectations of slow recovery in revenue growth.
Page’s management hopes that the second half of FY25 would prove to be better. This expectation has also helped some analysts keep their earnings projections intact. For instance, Dolat Capital Market said after Page’s June quarter results, “Though Q1FY25 profitability was below estimate, we have maintained our FY25/FY26 earnings per share estimates at ₹557/713, as we believe that the company will report recovery by H2FY25.”
Page has the exclusive licence for the manufacture, marketing and distribution of the Jockey brand in India, and a few other countries. To be sure, Page’s Q1FY25 revenue performance in terms of growth was the best in the past seven quarters. Still, a 4% year-on-year revenue growth on a favourable base is hardly exciting. The problem is that demand did not pick up adequately, although it did not worsen. In the earnings call, the management pointed out that there are early signs of positive indicators on consumption improvement. Also, there is an uptick in rural consumption.
Page’s secondary and tertiary sales were better than primary sales in Q1. The company saw better numbers at the point of sale versus what it realized in primary, helped by the inventory holding in the channel. According to management, discounting in the industry is now under control after being rampant in the first half of FY24 and then dropping substantially in the second half of FY24. In Q1FY25, there wasn’t any major discounting.
Meanwhile, in recent months, Page has strategically launched a few products, especially in the athleisure category, at sharp price points, addressing the value-seeking consumer.
The implementation of the auto replenishment system (ARS) is helping Page improve its distributor inventory levels and stock freshness. “It will be critical to monitor the channel inventory management and inventory levels post Q1FY25,” said Motilal Oswal Financial Services in a report.
Amid persistent slowdown issues and a challenging FY24 for retail across brands, Page anticipates it may be tough for it to achieve its earlier stated target of $1 billion revenue by FY26. It expects to maintain its Ebitda margin at 18-21% annually after clocking 19% margin in FY24 and Q1FY25 each. Motilal Oswal has modelled a gradual recovery with a CAGR of 12%, 15%, and 17% over FY24-FY26 in sales, Ebitda, and profit after tax, respectively. All eyes will now be on the pace of revenue recovery.
